Employment Disputes
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3. Can employers re-engage their employees under new contracts as self-employed persons in face of the implementation of the Mandatory Provident Fund Schemes to reduce the employees' benefits that are payable under the Employment Ordinance and other labour legislation?

Employers should not unilaterally change the status of their employees in face of the implementation of the Mandatory Provident Fund Schemes.

Under common law, if substantial and fundamental changes to the detriment of an employee have been made to the contract of employment arising from the employer's conduct without the employee's consent, that employee can claim for termination compensation from the employer on the grounds of constructive dismissal. An aggrieved employee with two years' service under a continuous contract can also claim remedies for unreasonable dismissal against the employer under the Employment Ordinance.

However, if the employer-employee relationship remains in essence, then subject to the Court's ruling on the actual circumstances of the case, the relevant employee may still be entitled to the benefits under the Employment Ordinance (and other labour legislation ), though that employee has been labelled as a self-employed person.

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